Unofficial translation
Interest on the trade credit is VAT exempt (judgment of the Supreme Administrative Court of October 6, 2020, reference number I FSK 66/18)
The case concerned a company dealing in the production of machinery and equipment for the mining sector and the provision of services for the mining and metallurgy industries. As part of its operations, the company concluded contracts with suppliers and recipients, according to which interest on the extended payment date was included in the price of goods or services. In the request for an interpretation, the company asked whether the interest should be included in the VAT taxable amount of the goods or services. In the interpretation, the authority recognized that the interest for deferment of payment due as of the moment following the delivery of the goods does not constitute an element of the taxable base for the delivery itself, but should be considered a financial service separate from the delivery. Consequently, by recognizing them as a form of trade credit, they enjoy VAT exemption.
The Provincial Administrative Court in Warsaw, and ultimately the Supreme Administrative Court, shared the interpretative body’s position, pointing out that regardless of the contractual nomenclature, it is a classic form of trade credit. As a result, the interest remuneration constitutes a financial service exempt from VAT.
Source Deloitte
